Basic Bank Accounts

A basic bank account, also known as a cash or cash card account, is a free to use, simple and convenient way for people to manage their money on a day to day basis. Account holders can arrange to have their income and any other money they receive paid into the account, and for bills to be paid out. They will also get a basic payment card for using in shops and online, and for withdrawing money.

Basic bank accounts don't offer any kind of overdraft or a cheque book, and customers can only spend what's available in the account at any given time. If a basic account does go overdrawn the customer won't be charged, but they won't be able to make any more transactions until they've deposited enough money to get back into credit, and cover those further payments.

By law, the only people who cannot have a basic bank account are those with criminal convictions for fraud, and people who fail a bank's identification checks. Everyone else in the UK is entitled to open one if they want to. But basic accounts are aimed in particular at people who can't get a standard current account, usually because they have a history of bad credit.

In fact, they're among the best options available for people who've had serious financial problems such as CCJs, IVAs, or being declared bankrupt, although only a couple of banks accept undischarged bankrupts. Although a credit check is part of the application process, it's used more to help confirm an applicant's identity than to see how poor our credit is.

However, some banks use the credit check to see if an applicant would be eligible for a standard account instead. Because basic bank accounts are fee free, they can cost the banks a lot of money to open and maintain, and some providers reserve them only for those who really can't afford to bank any other way.

All of the UK's biggest banks and building societies offer basic bank accounts, and their availability is supposed to be obvious enough that anyone who thinks they might need one can see that they do indeed exist.

However, some providers only offer their basic accounts to people who don't qualify for any of their other, standard, accounts. While some check if we'd be suitable for a standard account during the basic account credit check, other banks only offer basic accounts to people who apply for one of their standard accounts first, but fail the credit check on financial grounds.

Several - but not all - basic bank account providers allow people to apply online, as well as over the phone or in branch. If our chosen bank does allow online applications, beware that a trip to the local branch may still be required to provide proof of identity, even after the credit check has confirmed most of our details.

Acceptable forms of ID include a full, current passport or photocard driving licence, state-issued EU and Northern Ireland identity cards, and recent benefit entitlement or HRMC tax notification letters. Banks will usually ask for the originals - but do not post valuable documents like a passport or driving licence. It's possible to have copies of these witnessed at the Post Office, which is usually acceptable, although there is a charge for this service.

All basic bank accounts opened since January 1st 2016 have had to be completely fee free for everyday banking, with no charges for failed payments or accidental dips into the red. If a transaction will take the account overdrawn, the bank may choose to stop it. If it's a regular payment, the bank may choose to cancel it all together.

While the bank won't charge for doing this, the company expecting payment may levy late or missed payment fees, so customers need to make sure they have enough money in the account to cover all expected transactions. Also be aware that while basic account payment cards are free to use in the UK, they'll still rack up the same sort of foreign transaction fees as our bank's other cards if used abroad.

Be aware of managed bank accounts, which are also made available to people with past financial problems, but unlike basic bank accounts they charge a fee for managing the account holder's money.